March 18, 2025 at 01:08PM
The USDCAD is lower and testing the lower extreme of what has been a well-defined consolidation range between 1.4268 and 1.4471, as highlighted by the Red Box on the chart above. Price action has repeatedly tested the upper and lower bounds of this range, failing to sustain any meaningful breakouts when tariff related news pushed higher or lower. Earlier extensions above this range were largely driven by tariff-related news on Canada goods, but lacked the momentum to hold. These moves quickly faded, bringing the pair back into the established range.
The more recent breakdown in February below 1.4268 was lasted for a week and a half, with the price decline finding support near 1.4150 before bouncing higher back into the Red Box, signaling that buyers are still active at these lower levels.
Today’s move lower extended down to the lower extreme reaching a low of 1.42653 just below the low target, but could not sustain the selling. The price is back at 1.4290 as I type.
For upside potential, buyers need to push through the broken 61.8% retracement and the natural resistance at 1.4300. Getting and staying above that level could see more upside probing on the support bounce. Holding and a move through the low target would be the favored path at least in the short term.
Yesterday, the price tumbled below both the 100 and 200 bar moving averages on the 4-hour chart currently at 1.43699 and 1.43382 respectively (blue and green lines on the chart above). That break gave the sellers the go-ahead to push to the downside.
Will the support continue to hold and the price start to work to a back higher after testing key support? The dip buyers today are hoping that is the case.
PS on a break lower, the 100 day MA is at 1.42319. That is close to the low from March 6 at 1.4238. That area represents another key target on more selling.
PSS the price of the USDCAD has not traded below the 100 day MA since October 2024
This article was written by Greg Michalowski at www.forexlive.com.
